SUPPORT IS HOLDING
So far the trend line in force since the November low and the 50 dma is withstanding the selling pressure maintaining alive my preferred count, which needs from the June 6 low a sequence of higher lows - lower highs (Triangle). If this pattern pans out the thrust following the Triangle will complete the advance from the November lows opening the door to a multi-month corrective phase.
It is not a done deal yet but yesterday's bullish Engulfing Candlestick is suggesting that odds favour from the June 6 low a sequence of: Low / High / Higher low / Higher high
If this is the case bulls have to close the gap at 1642.81 and reclaim the 20 dma.
The equality extension target of the assumed wave (B) is located at 1658.44
But if the Triangle were the correct pattern the wave (B) would have a better look if it reaches the 1668 area.
Since from the June 6 low price is unfolding a corrective pattern it is extremely important that once /if bulls achieve the higher high any pullback has to be corrective in order to prevent a bearish Zig Zag down.
Regarding the EW count of the pattern from the May 22 high it is obviously corrective but in order to prevent a larger downward pattern the first step is to achieve the higher high in order to avoid a possible bearish Triangle wave (B) of a ZZ or wave (X) of a TZZ.
Next week I expect fireworks as we have FOMC on Wednesday as well as quarterly OPEX on Friday.
Enjoy the weekend.
